The Difficult Path for Education Jobs

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After losing 8.7 million jobs in 2008 and 2009, the U.S. economy finally added nearly one million in 2010. Yet last year, when overall jobs finally began growing again, education jobs shrunk by around 20,000. This comes as something of a surprise. The sector had once been thought virtually recession-proof. It's often lauded by economists and politicians alike as vital to American's future. So why is education having trouble, and what should we expect for teaching jobs in the years to come?

Breaking Down the Numbers

Let's start with what's actually happening with education jobs. Here's a chart showing education jobs as a percentage of total jobs versus the unemployment rate:

ed vs unemp 2010.png

For most of the period shown, the two lines move somewhat in sync. That's because education jobs tend to endure recessions better than most. As jobs are lost throughout the economy (and the unemployment rate rises), education jobs remain flat or continue to grow, which makes them a larger percentage of total jobs. That's why we see both lines rising through the latter part of 2009.

Unfortunately, we haven't seen enough new jobs in the economy since 2010 to see how this chart will change when the labor market recovers. But let's look at job gains and losses another way. First, here's total jobs added or lost each year since 2005:

total jobs added lost 2010.png

And here's the same chart for just education jobs:

annual ed jobs 2010.png

As you can see, in 2008, the broader economy lost millions of jobs, but education jobs actually continued to grow. In 2009, total job losses were even worse. Education jobs didn't grow as much then, but didn't decline. Then, in 2010, the situation flipped. This is the first time we've seen annual education jobs decline for as long as the government's data set goes -- back to 1990. It does provide data back to 1955 for just state and local education jobs (which excludes private education). That reveals two years in the past 55 (in the early 1980s) with job losses on the state and local levels, but none as deep as what was seen in 2010.

Education Subsectors

Here's a better breakdown of the past three years, so you can understand the contributing factors:

ed sector breakdown 2010 v3.png

Let's consider each sector:

Private Education

Private sector education jobs actually have endured the recession quite well. That sort of makes sense, since demand for private education hasn't changed much. University and private secondary education enrollment has likely remained largely the same. After all, the government now backs student loans, so recession probably hasn't struck private universities too adversely.

State Education

You might expect to see state education endure a little more pain. After all, state funding has been under stress as states have cut budgets in response to lower tax receipts and overspending over the past few years. Yet state education jobs did just fine in 2010 only fell slightly in 2009.

This may have something to do with the kind of schools within this category. Nicholas Johnson, vice president for State Fiscal Policy at the Center on Budget and Policy Priorities, explains that the state government category is almost all higher education jobs. He says that state budget cuts don't show up in college and university payrolls as clearly, because they have other sources of income. They can raise their tuition, cut scholarships, or rely on other ways to supplement their lost government funding.

Local Education

From the breakdown above, it's pretty clear that the local government education jobs are the ones really bleeding. In the past two years, they've declined by 132,700. These contrast with the state education jobs in type, as they're predominately K-12 teaching jobs.

Johnson says that this partially explains the subsector's trouble. Local K-12 education funding is more tied to the lower tax receipts and the real estate market's troubles. "Given what's happening with the property market, with property taxes, local school districts don't have as many places to turn," he says. So when local governments incur deep budgetary cuts, it's hard to spare education jobs -- even if politicians say education is a priority.

Looking Ahead

What can we expect over the next few years? That depends a lot on how the economy improves. If unemployment declines and tax receipts rise, then state and local governments will be in a better position to stop cutting or even hire back more teachers. If they don't, then more layoffs could result.

In the shorter-term, this is a serious concern. Johnson explains that the 2009 stimulus bill provided funding through 2011 to states that mostly forced them to keep education spending constant in order to obtain federal funding for a portion of their education costs. That provision expires in 2011, however, so we could see more state and local education jobs won't be protected if these governments continue to make budgetary cuts.

Don't look for the federal government to help much here. The divided Congress isn't expected to provide much additional stimulus. In fact, deficit concerns will likely result in budget cuts on the national level. Although federal funding for schools isn't very significant, if any cuts do impact education, then that could be another blow to schools.

This all makes for a particularly difficult environment for graduating college seniors to find a job in education over the next few years. As long as federal, state, and local governments are tightening their belts, education hiring will be weak. Even if the economy improves as most economists believe, budgets are likely to continue to struggle over the next couple of years. The exception, however, is private education jobs, which have maintained their strength over this period.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
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